The US Stock market has been dicey in the past 3 weeks on the trot. Highs are followed by huge drops and it further adds to the instability of the market sentiment. Such a drop means a buy-in situation for investors as they will be allocated with more shares due to the overall low price per stock. On Wednesday, the panic in the stock market just maximized after the WHO called coronavirus a pandemic. With the announcement, there have been substantial drops in all of the major indexes, oil prices and also the 10- year treasury yields.
The drop in the stock market meant a rally in the government bonds as the 10- year treasury fell to almost 0.32% on the day. This shows that panic is real but the wise thinker would always suggest that such panics are expected in a market with such huge worth. Hence, if you are planning to buy stocks, here are the two choices you can make-
Firstly, you can choose to liquidate stocks that do not pay you adequate dividends. Now that there are no 10- year bonds available with a yield of over 1%, you need to make some swift choices. In such a market, Apple’s dividend of 1.2% yield looks extremely promising. However, people are in doubt whether Apple will be able to pay the dividend or not given the state of the market at this moment. The S&P 500 index still has substantial points in its tally to lose and hence the stock prices of Apple aren’t at its lowest as of yet.
Secondly, you need to plan for long-term holding now. Even if you end up buying Apple’s stock at rock bottom prices, it is a must that you hold on to those stocks for a long period of time. As the market recovers from bear and turns into a bull, it will showcase greater possibilities for your stocks to yield better returns. Though the market is in panic, the simple tip for you would be to not indulge in the panic and remain calm and stick to your decisions. History has it that whenever the market has slumped, the ones who remained invested in the stocks for the long-term have reaped major benefits when the indexes start to grow back again.
Choose wisely because even in this volatile market, there’s room to make profits with the right decisions. If you aren’t participating in the market, keep panic at bay because this won’t impact you in any way.